There was mixed news on PC and microprocessor market growth this week, while the Groupon initial public offering Friday showed that there are plenty of people betting that social media will continue to drive technology trends.
While PC microprocessor sales increased year over year in the third quarter, economic uncertainty and softer-than-expected demand have caused IDC to cut forecasts for the market this year.
Worldwide PC microprocessor revenue in the third quarter rose to £6.7 billion (US$10.7 billion), up by 12.2 percent compared to the prior quarter and up 16.1 percent year on year, according to IDC's latest PC microprocessor market share study.
However, IDC said in its report Thursday that it is cutting its growth forecast for the market from 9.3 percent to 7.3 percent for the year.
"Combined with a weak macroeconomic outlook - due to sovereign debt issues in Europe and poor job growth in the United States - IDC is reducing its client PC processor (desktop, mobile, x86 server) unit growth forecast for 2011," the company said.
In its own report earlier in the week, Mercury Research also said that chip shipments have grown despite flat-to-slow growth in PC shipments worldwide over the past year.
Tablets up, netbooks declining
Canalys had a more upbeat look at the PC market, however. The company said in a report Wednesday that, when tablets are included, total shipments of PCs increased in the third quarter by 18 percent year over year. User enthusiasm over tablets is a double-edged sword for vendors, though.
"The proliferation of pads drove overall PC market expansion, though the form factor continued to disrupt traditional desktop, notebook and, in particular, netbook sales," Canalys said in the report.
Total tablet shipments were almost three times as many in the third quarter compared to the same period a year ago, while notebook shipments increased 9 percent and desktop shipments jumped 8 percent. The big losers were netbooks, which declined 28 percent year over year in terms of shipments, Canalys said.
Apple's iPad shipments were up 166 percent, though its share of the worldwide market fell to 67 percent in the third quarter from 96 percent a year earlier due to competition from vendors such as Samsung, Asus and Acer, Canalys said.
Meanwhile, the delay of the updated Apple iPhone caused third-quarter smartphone numbers to come in a little lower than expected. IDC said the worldwide smartphone market increased 42.6 percent year over year in the third quarter, though there was a slowdown within key mature markets. IDC said vendors shipped 118.1 million units in the third quarter. However, the 42.6 percent growth was lower than IDC's forecast of 49.1 percent for the quarter.
Samsung took the top spot in smartphone vendor rankings, IDC said, with 20 percent market share total, though Apple's 14.5 percent share meant that the iPhone is still the best-selling single smartphone.
Qualcomm, which designs processors for mobile devices, looks poised to ride the smartphone wave. On Wednesday it said third-quarter sales rose 39 percent year over year to £2.62 billion ($4.2 billion), while net income rose 22 percent to £6623.4billion ($1.06 billion).
For the current quarter, the company said it expects sales of £2.72 billion ($4.35 billion) to £3 billion ($4.75 billion) and a profit of £0.54 ($0.86) to £0.57 ($0.92) a share. Analysts polled by Thomson Reuters estimated revenue of £2.7 billion ($4.25 billion) and EPS of £0.52 ($0.84).
Groupon up 40% on IPO price
Meanwhile on Friday, group deals site Groupon Inc. saw great demand for shares. It launched on the Nasdaq at £17.50 ($28) a share, up 40 percent from its IPO price. It ended up closing at £16.24 ($26).
The IPO may pave the way for further public offerings after a dry spell. A late summer lull combined with persistent market volatility led to a steep decline in global IPO activity in the third quarter, making it the least active quarter of global issuance since the third quarter of 2009, according to a Renaissance Capital report. Online games maker Zynga is set to go public and Facebook is expected to launch an IPO next year.
However, while Groupon shows that there is interest in tech IPOs for hot technology, volatility in the markets may continue to make public offerings problematic. When the stock market experiences wide swings, as it has in recent months, vendors find it difficult to price shares.
Though corporate share prices have recovered from their third-quarter lows, thanks at least in part to strong tech vendor earnings news, continued concern about unemployment in the U.S. and European sovereign debt continues to shake markets. Markets this week ended on a down note, mainly due to concerns about a possible rejection by Greece of a sovereign debt bailout package being offered by France and Germany. The matter is set for a referendum in Greece over the next month. All major markets in the US closed down Friday, with the Nasdaq computer vendor index slipping 6.80 points to 1437.85.